Energy stocks short of steam

While most metals and resource sector stocks have been caught up in a wave of optimism about a second boom as commodities markets run hot, some energy stocks have been left out in the cold. Leading geothermal energy stock
Geodynamics
, which is developing emissions-free renewable energy generation from hot fractured rocks, has been one of the better performing names among the group of relatively unknown stocks. It has added some 60 per cent in the September quarter and 90 per cent since a June low. However, despite a flat market over the past 12 months, the whole sector is well down over that same time. Given that most of these companies are in their infancy and still in exploration and development phase, the sector remains largely a speculative play. Geodynamics is trading at an enterprise value to resources multiple of above $450 a petajoule, while the smaller
Geothermal Resources
is fetching an EV/resources multiple of about $60. However, it has about a third of Geodynamics’ level of inferred resources, says Wilson HTM.